Oceanex asks Newfoundland court to quash Marine Atlantic subsidies

The Telegram

Published: Oct 23, 2017 at 8:42 p.m.

Updated: Oct 24, 2017 at 10:24 a.m.

Marine Atlantic CEO Paul Griffin spoke to the media Monday outside the Federal Court in St. John’s. The court was hearing a case where Oceanex is challenging the subsidy to Marine Atlantic for commercial freight.

Lawyers converged on the Federal Court in St. John’s Tuesday for a trial that could be important to life in the province, as Oceanex challenges the taxpayer subsidy of Marine Atlantic.

Since Oceanex and Marine Atlantic together bring in nearly all of the commercial freight in Newfoundland, the case could have far-reaching effects.

The trial is expected to last several days, as lawyers delve into the history of Marine Atlantic, and the terms of union negotiated when Newfoundland joined Canada.

At its core, Oceanex is asking the court to order the minister of Transport to reconsider his decision in approving the 2016-17 freight rates for Marine Atlantic. Marine Atlantic is asking the court to toss the whole matter, saying the court doesn’t have jurisdiction.

The terms of union between Newfoundland and Canada stipulate that the federal government must operate a ferry service between the island and Cape Breton, but it doesn’t say Ottawa must subsidize the service.

Meanwhile, the Canada Transportation Act states, “competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services.”

Lawyers for Oceanex argue that the minister should have considered Oceanex’s competitive position when setting freight rates.

“All we’re saying is that until such time as the minister has addressed the relevant policy constraints on his exercise of discretion, those rates can’t stand,” lawyer Guy Pratte argued.

On the other hand, Marine Atlantic CEO Paul Griffin told reporters the case fundamentally affects the cost for ferry service.

“From Marine Atlantic’s perspective, it really comes down to the level of subsidy we require to run the service, and that level of subsidy determines how often we can sail every day, how often we sail during the year and the price we charge,” he said.